IMF Urges Japan to Maintain Flexible Exchange Rate Regime

Economy

Washington, May 13 (Jiji Press)--Japan should maintain its commitment to a flexible exchange rate regime, the Executive Board of the International Monetary Fund said Monday.

"Japan's long-standing commitment to a flexible exchange rate regime will help absorb shocks and support monetary policy's focus on price stability," the IMF's executive directors said in a statement issued after the end of an annual review of the country's economy.

The Japanese government and the Bank of Japan are believed to have conducted yen-buying, dollar-selling foreign exchange market interventions just after the dollar topped 160 yen for the first time in some 34 years in late April.

The Japanese currency gained some ground against the dollar for a while, but it is weakening again recently.

The IMF statement said that "state-contingent purchases of Japanese government bonds by the Bank of Japan will help mitigate excessive shifts in yields that could undermine macrofinancial stability during this historic policy transition."

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